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What's in Store for Century Aluminum (CENX) in Q3 Earnings?

Century Aluminum CompanyCENX is scheduled to report third-quarter 2017 results after the closing bell on Oct 26.

Century Aluminum posted a profit of $7.1 million or 7 cents per share in second-quarter 2017 as against a net loss of $9.5 million or 11 cents it posted a year ago. Results in the reported quarter were aided by a $6.1 million unrealized loss associated with forward and derivative contracts.

Barring one-time items, Century Aluminum's adjusted net loss came in at a penny per share in the quarter missing the Zacks Consensus Estimate of 29 cents.

The company has outperformed the Zacks Consensus Estimate in two of the trailing four quarters while missing in the other two with an average negative earnings surprise of 751.2%.

Shares of Century Aluminum have moved up 21.5% in past six months, outperforming the 12.8% gain of its industry .

Let's see how things are shaping up for this announcement.

Factors to Consider

Century Aluminum is seeing strong demand for its products and the general manufacturing and construction market has also been strengthening of late. However, the company still expects a global supply surplus in primary aluminum for the foreseeable future, triggered by surging and heavily subsidized production from China. Trade data continue to show record exports of aluminum products from China.

Century Aluminum also expects alumina unit costs to decrease in third-quarter 2017. The company saw an increase in the costs of other key raw materials in the second quarter and expects this trend to persist in the third quarter.

Cost of these inputs were up around $1 million during the second quarter due to an increase in carbon anode costs. Prices of coke and pitch rose during the second quarter and are expected to remain elevated in the third. The company sees roughly $5 million in increased costs of these raw materials in the third quarter. The company is also seeing high power costs.

However, Century Aluminum is implementing a number of actions to reduce costs and preserve cash amid a weak operating environment. The company is expected also gain from strong aluminum demand across automotive and aerospace markets in its key regions like North America and China. The company is also poised to benefit from its acquisitions.

Century Aluminum Company Price and EPS Surprise

Century Aluminum Company Price and EPS Surprise | Century Aluminum Company Quote

Earnings Whispers

Our proven model does not conclusively show that Century Aluminum is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:

Zacks ESP : Earnings ESP for Century Aluminum is currently pegged at 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 19 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank : Century Aluminum currently carries a Zacks Rank #3. Though a Zacks Rank #3 increases the predictive power of ESP, a 0.00% ESP makes surprise prediction difficult.

Stocks With Favorable Combination

Here are some companies in the basic materials space you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

FMC Corporation FMC has an Earnings ESP of +0.88% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

Westlake Chemical Corporation WLK has an Earnings ESP of +5.14% and sports a Zacks Rank #1.

Ingevity Corporation NGVT has an Earnings ESP of +2.94% and flaunts a Zacks Rank #1.

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FMC Corporation (FMC): Free Stock Analysis Report

Westlake Chemical Corporation (WLK): Free Stock Analysis Report

Ingevity Corporation (NGVT): Free Stock Analysis Report

Century Aluminum Company (CENX): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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